Understanding Historical Opportunities from One Belt One Road Initiative

Overview

The Belt and Road initiative is made of interconnected land and maritime routes. Its vision is driven by the wish to create increased connectivity along the 60 countries that are involved in the projects. The connections and platforms of cooperation created all along the Belt and Road are likely to spur growth by filling the gap of crucial infrastructure. It is estimated that the Belt and Road will require $2 to $3 trillion in new resources every year for the coming decades; that’s 3% to 4% of additional global GDP growth. The initiative is just starting. It is likely to unfold in the course of the next few decades, creating therefore a momentous and historical phase of new prosperity, integration and collaboration for the world. Indeed, the 60 countries that are part of the Belt and Road represent 60% of the world population, 40% of global GDP and 40% of global foreign exchange reserves held by their respective central banks.

The Belt and Road articulates itself around two networks of connections;

A network of land connections, known as the “Silk Road Economic Belt” or the “One Belt”, made of economic

A network of sea connections, known as the “21st Century Maritime Silk Road” or the “One Road”.

The Silk Road Economic Belt

The need for infrastructure in the economic corridors of the SREB (roads, bridges, railways, energy and health) will generate further integration between many underdeveloped regions. Each of these economic corridors will reach diﬀerent and very specific objectives.

China – South East Asia Corridors: Will connect industrial and transportation infrastructure.

The Funding and Financial Landscape

In order to fund these projects, a specific financial architecture was needed, one that could fit and complement the current global monetary and financial system which is articulated around the International Monetary Fund and the World Bank. A new constellation of institutions was needed, specifically institutions that were structured to help some of the countries that have accumulated large foreign exchange reserves and that needed to recycle them into sound and sustainable infrastructure projects. China has therefore created new multilateral banks and funds to specifically put these surpluses to work and create the conditions for shared prosperity and sustainability. As mentioned above, many of the countries involved in the Belt and Road actually hold 40% of the world’s foreign exchange reserves. These projects represent a historical opportunity to recycle them into infrastructure that will bear the fruit of prosperity for generations to come.

Chances and Opportunities

Experienced businesses and professional experts are facing one of the most historical opportunities they will ever witness. In order to take full advantage of this situation, two crucial steps are needed:

To identify the sector(s) where their expertise, services and products will be

To identify the most appropriate business model(s) that would allow them to fully participate (refer to the above section on “companies to follow”).

Each of the projects in the Belt and Road has a digital counterpart. Like the Yin and the Yang, each of these sectors generates a digital trail or a digital shadow that we have identified as specific areas within the “Digital Silk Road”. We are listing below all the sectors that are potential areas of demand for products and services, with their potential digital counterparts.

Financial and professional services: New institutions like the AIIB and the Silk Road Fund were created to fund the projects, but they will need partners to be able to cover all the financing. This will lead to new issuance of financial instruments such as bonds, loan syndications, IPOs, public/private partnerships, special purpose vehicles and other instruments of fundings. Because many projects are taking place in Muslim countries, it is also likely that some Islamic Finance instruments will be used to fund some of these projects (Sukuk islamic bonds issued out of Dubaï or Kuwait for example). The most recent $65 billion deal between China and Saudi Arabia will certainly include funding that will follow islamic finance principles through the co-financing of projects with the Islamic Development Bank in Saudi Arabia. JUMORE is already collaborating with the Astana Financial Center in Kazakhstan to set up a joint fund to assist in the development of Kazakhstan’s infrastructure, industry and supply chain.

Other financial and professional services: Because of these new issuances of financial instruments, there will be an increased need for legal services, accounting, monitoring, project management, certification and auditing. This will also lead to increased flows of trade finance, commodities trading, hedging and futures transactions, insurance for marine and aircraft services, as well as payments/settlements and treasury management in various currencies. These are all services that JUMORE will be able to provide through its network of recognized professionals and experts.

Transportation and logistics: There will be unprecedented opportunities in countries linked to the B&R through trucking, railways, ports, pipelines, and other associated services. This will include transportation and logistics across the large distances of countries along the B&R countries. DHL (Germany) and HP (USA) are some of the companies taking part but others too are taking the lead: COSCO, China Shipping Group, China Merchants Holding Company, China Harbor Engineering Company, China Overseas Port Holdings, Shanghai International Port Group, Hong-Kong based Hutchison Port Holdings. The B&R will lead to the construction of large ports that will need to be managed and maintained. It will create more shipping business. JUMORE will be part of that development through its network. It is already helping Kazakhstan with the development of its supply chain.

Information and Communication Systems: The increased funding, transportation, trade, services and movement of goods generated by the B&R will also lead to the need to expand information and communication systems. The newly created AIIB, Silk Road Fund, BRICS New Development Bank and others, will all require new information systems. There will be demand for more hardware and software, network equipments, cables and servers as well as other related equipment and services. The integrated flow of goods and their transportation will also require state of the art systems of monitoring and management. This is a unique opportunity to integrate right from the start the newest and most advanced digital technologies such as Big Data, Smart Cities, Smart Manufacturing, Internet of Things, Digital Investment (see Digital Silk Road below).

Commerce, manufacturing and supply chains: The implementation of the most advanced digital technologies based on big data, smart cities and smart technologies will create the most state of the art and eﬃcient methods of commerce and manufacturing where everyone will win. It will lead to increased exchanges of goods, finance and ideas, and is likely to reshape the entire map of supply chains around the world, for the benefit of everyone. This increased connectivity through trade, finance and knowledge will bring more prosperity to economies that otherwise would have remained isolated. JUMORE is already contributing to the facilitation of new commerce, manufacturing and supply chains with its collaboration in Kazakhstan.

Energy,natural resources and Agriculture: The completion of many of the infrastructure projects along the B&R will allow many resource-rich areas and regions to open to the world. It will also create a more diversified source of supply to consuming markets. Agricultural products from regions and countries that are land-locked will also be able to access larger markets. These are all opportunities for more exchange and business. JUMORE is already playing a major role through its commitment in Kazakhstan.

The Digital Silk Road

Big Data: With the completion of many of the infrastructure projects along the B&R, we can expect a substantial increase in trade, estimated to amount to $2 to $3 trillion every year. These new transactions will generate a volume of information and new data covering 60% to 70% of the world population. The big data that will emerge from this new volume of exchange will provide an unprecedented access to information to all the communities that are located along the Belt and Road initiative. This enhanced connectivity brought by big data will accelerate the path to prosperity and wealth for many countries and regions along the corridors described above. As an Ecosystem For Business and a gateway to knowledge, JUMORE can provide a unique perspective and understanding about these emerging volumes of trade.

Smart Cities: Cities that are located along the corridors mentioned above will be oﬀered a fantastic and historical opportunity to adopt some of the most sustainable technologies available to mankind. The benefits of Big Data, combined with the latest advances in digital technologies, will place these cities (small or large) on a grid of connectivity that will allow them to bring prosperity, well-being and knowledge to their respective citizens. JUMORE is already facilitating this movement by collaborating with several cities and provinces in China and Kazakhstan (Shenyang, Astana). By joining the JUMORE platform, you too can be part of these historical initiatives.

Smart Manufacturing: Thanks to the implementation of billions of US$ in sustainable projects, the Belt and Road initiative already appears as a powerful blue print for digital transformation in manufacturing. By joining the JUMORE platform, you will be able to also participate to that movement and be part of best practices that are about to bring the next industrial mutation.

Smart Energy: Because of the sustainability requirement embedded in the greatest majority of the Belt and Road investments, it is expected that the Smart Energy practices will go hand in hand with the Smart Cities initiatives mentioned above. Thanks to its experience in collaborating with governments and cities in China and Kazakhstan, JUMORE’s platform represents a formidable ecosystem for the emerging smart energy modalities and technologies.

Internet of Things: Because of the timing of these new investments in infrastructure along the Belt and Road, one can expect the most advanced technologies in the Internet of Things to be implemented. Combined with the power of Big Data, and China’s position as an industrial power, it is expected that these new investments will unleash the new phase of industrial revolution. As a member of the JUMORE platform, you will have a unique opportunity to be part of it.

E–Commerce/Digital Investment/Digital Transformation: Digital transformation is only in its initial phase. Many organizations around the world have just started to implement it and to integrate it in their strategic vision. The technological acceleration currently taking place remains confusing and diﬃcult to formulate for many. Yet, along the Belt and Road, these new initiatives will provide a practical and tangible representation of what the new possibilities can look like. It is very likely that many around the world will be inspired by case studies on how the digital transformation is taking place along the Belt and Road. They will understand how they can fully master the power of E-Commerce, digital investments and digital transformation. JUMORE’s Ecosystem For Business will be crucial as an agent of understanding and exchange, and as a gateway for knowledge.

JUMORE: A Unique Gateway to the Belt and Road and to World Trade

Reach out to your Chamber of Commerce, Trade Representatives and Trade Association: Because the AIIB is a joint initiative which gathers many countries in the world, there is a great chance that the funding and financing of many of the B&R projects also include some financial partners from your own country or your own This opens the door to your participation in these projects either as a company, as an individual expert or consultant, or as a contributor within the frameworks described above. Your chamber of commerce, trade representative in your embassies and trade commissions, and trade association will be able to guide your steps to a successful participation in the B&R projects.

Subscribe to JUMORE: By subscribing to the JUMORE platform, you are accessing a unique gateway of knowledge to the most up-to-date information about the B&R. You are immersing yourself into an ecosystem (E4B) that is uniquely designed to increase your

exposure to the frameworks described previously. Many of the Chinese State Owned Enterprises that participate in the B&R projects are also part of JUMORE’s E4B.

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